It is in the taxpayer’s interest to quickly and administratively resolve the tax issue. A benefit of litigating in the US Tax Court is that the taxpayer does not have to prepay the taxes as required for litigating before a US District Court or the US Court of Federal Claims. There are two avenues to US Tax Court: challenges to tax assessments or disagreement with the denial of collection alternatives.
The IRS is required to issue a Notice of Deficiency before assessing additional tax. The taxpayer has 90 days to file a Petition to US Tax Court to challenge the assessment. However, a case petitioned to the US Tax Court will normally be referred to IRS Appeals for settlement if the taxpayer previously bypassed IRS Appeals.
The IRS is required to issue a Notice of Intent to Levy and Your Right to a Hearing before levying a taxpayer with unpaid taxes that have already been assessed. If the taxpayer requests a Collection Due Process within 30 days of the Notice and disagrees with the Notice of Determination from IRS Appeals, the taxpayer has 30 days to file a petition to US Tax Court. In this situation the US Tax Court will review the determination under an abuse of discretion standard. Upon the filing of a petition to the Tax Court the IRS is prohibited from collecting the taxes until the case is closed and appeals rights are exhausted. However, this time is added back to the 10-year collection statute of limitations after case is closed.